Greater New Orleans

Boggs medical center may become a nursing home

The local nursing home operator St. Margaret's is exploring the possible purchase of Lindy Boggs Medical Center, the devastated Mid-City hospital that was slated as recently as last year to be torn down to make way for a retail center.

St. Margaret's signed a purchase agreement for the hospital this week and plans to spend the next three to six months inspecting the building and weighing whether to move forward with the deal, according to Jason Hemel, the vice president of business development.

Hemel said the nonprofit, which is affiliated with the Roman Catholic Church and serves the elderly poor, would like to build a state-of-the-art nursing home in part of Lindy Boggs and seek a hospital operator to run the remainder as a health-care facility open to the public.

"St. Margaret's is not in the business of running hospitals. We would look to bring in an operator, if that aspect is even feasible, " Hemel said. "We are very much in the infancy of our due-diligence process."

Lindy Boggs was among the suite of five hospitals that Tenet Healthcare, a publicly traded hospital operator based in Dallas, ran in the New Orleans area before Hurricane Katrina. Tenet sold three hospitals after the storm to Ochsner Health System, which declined to purchase Lindy Boggs because of its heavy damage.

Tenet sold the vacant hospital in 2007 to Victory Real Estate Investments, a Georgia company that accumulated an enormous sweep of land in Mid-City for a big-box retail development, an effort that met with considerable resistance from neighborhood groups.

As the economy contracted and retail chains began rationing the launch of new stores, Victory put its retail plans on ice and enlisted local real estate broker Don Randon to find a buyer for the property it owned in Mid-City. Randon referred calls about the purchase agreement for Lindy Boggs to St. Margaret's.

Hemel declined to disclose the agreed-upon price for Lindy Boggs, which Victory acquired for $11.5 million. Tenet agreed as part of the sale to pay $2.1 million to tear down the hospital, which would have effectively reduced the price Victory paid had the company moved forward with the demolition. The hospital still stands.

St. Margaret's currently runs a nursing home in Bywater, but Hemel called it a temporary facility that was designed to help bring the elderly poor home after the storm. The Federal Emergency Management Agency helped renovate the Bywater location, and it will provide additional money for the permanent nursing home, Hemel said.

The nonprofit also hopes to secure new market tax credits to help with the renovation of the portion of Lindy Boggs that would be open to the public as a health-care facility. New market credits are a federal incentive designed to spur investment in distressed and low-income areas.

Hemel said Lindy Boggs would require a major renovation before St. Margaret's could move in. He said a new, modern nursing home at the former hospital would serve about 116 seniors, about the same as the temporary facility on St. Claude Avenue.

The purchase agreement St. Margaret's signed this week includes the main hospital as well as the medical building, but not some parking and other land associated with the former hospital.

Hemel said St. Margaret's would hold meetings in the coming weeks with Mid-City neighborhood groups. Jennifer Weishaupt and Virginia Blanque, both Mid-City neighborhood leaders, could not be reached for comment Thursday evening to comment on the proposal.

"We want community involvement, " Hemel said.

Residents previously have expressed frustration with the slow return of health care to Mid-City, and they supported the U.S. Department of Veterans Affairs as it explored whether to build its new hospital on the site of the former Lindy Boggs hospital. The VA eventually selected a site closer to downtown, where it would share a hospital campus with Louisiana State University.

As it mulls whether to buy the former Lindy Boggs site, St. Margaret's is managing the redevelopment of a medical center in Algiers that used to be owned by Little Sisters of the Poor. Hemel said the nonprofit is renovating St. Luke's, a facility next to Holy Cross College, on behalf of several partners.

The 130,000-square-foot building on the West Bank eventually will hold a nursing home, a geriatric psychiatric hospital, a rehabilitation center, a cardiology office run by Tulane and a retail pharmacy, among other health-care uses, according to Hemel.

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Kate Moran can be reached at kmoran@timespicayune.com or 504.826.3491.